Question

Prepare a trading and profit and loss account of M/s Green Club Ltd. for the year ending March 31, 2017. from the following figures taken from his trial balance:

Account Title	Amount ₹	Account Title	Amount ₹
Opening stock	35,000	Sales	2,50,000
Purchases	1,25,000	Purchase return	6,000
Return inwards	25,000	Creditors	10,000
Postage and Telegram	600	Bills payable	20,000
Salary	12,300	Discount	1,000
Wages	3,000	Provision for bad debts	4,500
Rent and Rates	1,000	Interest received	5,400
Packing and Transport	500	Capital	75,000
General expense	400
Insurance	4,000
Debtors	50,000
Cash in hand	20,000
Cash at bank	40,000
Machinery	20,000
Lighting and Heating	5,000
Discount	3,500
Bad debts	3,500
Investment	23,100
	3,71,900		3,71,900

Adjustments:

1. Depreciation charged on machinery @ 5% p.a.
2. Further bad debts ₹ 1,500, discount on debtors @ 5% and make a provision on debtors @ 6%.
3. Wages prepaid ₹ 1,000.
4. Interest on investment @ 5% p.a.
5. Closing stock ₹ 10,000.

Answer 1

Dr.	Trading Account for the year ending March 31, 2017				Cr.
Particulars		Amount ₹	Particulars		Amount ₹
Opening Stock		35,000	Sales	2,50,000	2,25,000
Purchases	1,25,000	1,19,000	Less: Sales Returns	(25,000)
Less: Purchase Returns	(6,000)		Closing Stock		10,000
Wages	3,000	2,000
Less: Prepaid Wages	(1,000)
Gross Profit		79,000
		2,35,000			2,35,000

 

Dr.	Profit and Loss Account for the year ending March 31, 2017			Cr.
Particulars		Amount ₹	Particulars	Amount ₹
Bad Debts	3,500	3,410	Gross Profit	79,000
Add: Further Bad- debts	1,500		Interest on Accrued Investment	1,155
Add: New Provision	2,910		Discount	1,000
Less: Old Provision	4,500		Interest Received	5,400
Discount on Debtors		2,280
Postage and Telegram		600
Salary		12,300
Rent and Rates		1,000
Packing and Transport		500
General Expenses		400
Insurance		4,000
Discount		3,500
Depreciation on  Machinery		1,000
Lighting and Heating		5,000
Net Profit		52,565
		86,555		86,555

 

Balance Sheet as on March 31, 2017
Liabilities		Amount ₹	Assets		Amount ₹
Creditors		10,000	Cash in Hand		20,000
Payable		20,000	Cash at Bank		40,000
Capital	75,000	1,27,565
Add: Net Profit	52,565		Debtors	50,000	43,310
			Less: Further Bad-Debts	1,500
			Less: New Provision	2,910
			Less: Discount on Debtors	2,280
			Investment	23,100	24,255
			Add: Interest on Investment	1,155
			Machinery	20,000	19,000
			Less: Depreciation	1,000
			Prepaid Wages		1,000
			Closing Stock		10,000
		1,57,565			1,57,565